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Rental nets from years past-true numbers

March 21st, 2016 at 03:43 pm

HI all

Just reading through my rental net sheets from years past. My goal is to smooth out the homes this year and next and realistically complete any lingering 'large repair/upgrade items' this year and then go to maintenance mode

The homes had a lot deferred maintenance items when they were bought. some large (roofs whatever). I got them at super reduced price but realizing I maybe could have gotten them lower (with wht I know now or have learned) .. maybe not. in either case.. I GOT the homes which is a big step in and of itself

Realize that currently all net goes to the mortgages(I am paying these off on a SUPER accelerated rate). 6 homes already paid off, 3 units will be paid off 3/2018

So, my NET if I did not have a mortgage was

2014- $20945 (w repairs/vacancy charges of $50884)
2015- $34288 (w repair/ vacancy charges of $37674)


I am going to set a goal to hit $60k NET (before mortgage for this year). Looking at spreadsheets my major factors that I can control are VACANCY and REPAIRS. I wil track those closely and can more easily do so with the new manager

I am forecasting approx $20k of large repair costs outside of normal wear and tear. which includes roof, siding, driveways. I am starting that this week. I have no other large repairs forecasted and day to day repairs are runnning WAY LESS than last year. I still want to reduce my large repair costs year to year and am coming to the end of the list. realistially this siding/roof I do not HAVE to do but thimk it makes sense long term

A learning year and probably a wild ride but got to get this smoothed out so I can depend on it more. It has been a wild 2.5 years so far.

Rachael



Posted in 6 homes-rentals, 3 units-rentals, Musings | 6 Comments »

6 Responses to “Rental nets from years past-true numbers”

  1. livingalmostlarge Says:
    March 22nd, 2016 at 04:53 am 1458622398
    1458622398

    Are you using the 6 paid off homes to pay of the 3 unit rentals? Why did you choose to pay off the 6 home versus 3 units? What are the values of the homes now? Does it matter if they appreciate a lot? Will you sell?

  2. Rachael777 Says:
    March 22nd, 2016 at 01:28 pm 1458653328
    1458653328

    I am using all I get from any homes to pay off the remaining debt on the 3 units . I have $120k to pay off in slightly less than 2 years. Homes have appreciated but these are smaller homes.. they are not going to be big appreciators in general (at least not now ).. market is still pretty low in some of these areas.. (which is why I think maybe I could have gotten then for even less than I did with an aggressive inspection.. biut realistially not that much less and to get 3% terms on a seller contract is worth something too so with the 6 homes I got IN .. now I stablize with good management and figure out the plan..).. still though I DO think they have gone up. . I am not going to sell right now. They are solid rentals . I have done some fix up work so I know the homes in and out and right now am looking for cash flow. With the new manager I am evaulating how he does with renting these out to good long term tenants. so far (only been 5 months) but so far the difference is DRAMATIC (shockingly so)..and realistically if they can be rented well and are solid. no need to sell. They are just for cash flow.

  3. Rachael777 Says:
    March 22nd, 2016 at 01:35 pm 1458653758
    1458653758

    oh and the reason I decided to pay off the 6 homes first was because that was more 'stressful' and unpredictable. Recently they are smoothing down but under the past 2 property managers it was just very stressful.. my payment for that exceeded $5500 a month. I am actually paying about the same amount on the 3 units each month (little less) but the 6 homes contract was written that way (5 year term) so I HAD to come up with it or lose the homes (seller financing contracts are very strict) . I am accelerating the 3 units voluntarily so if worst came to worst and some super bad situation happened I could drop the payment down to where it was and still meet my obligation

  4. Rachael777 Says:
    March 22nd, 2016 at 03:47 pm 1458661650
    1458661650

    For me to reach my $60k+ net goal I have to have $11k or less of normal maintenance/repairs/unit turn over clean up costs (I am on target but need to have lower turnover this year) and then my already forecasted $22k EXTRA improvements . I am already hoping to have higher collections and more rent overall. about 1/3 of the way through the year so far

  5. LivingAlmostLarge Says:
    March 23rd, 2016 at 11:05 pm 1458774359
    1458774359

    Interesting. I wonder how we would find such rentals and also do seller financing. I wonder a lot of people are buying where we are rentals that don't cover the mortgage. Why do people do that?

  6. Rachael777 Says:
    March 24th, 2016 at 01:37 am 1458783458
    1458783458

    People typically buy rentals even with a net loss because they want the writeoff. It is not e to easy find ones where the #s work but it is not impossible either. I find that typical of Dr/attorney types (including my father)

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